Experts Warn of Accumulating Too Much Company Stock in 401(k) Plans.

Byline: Mark Davis

Jan. 20--The collapse of Enron Corp. should be a warning to anyone with a 401(k) plan: Employees who load up on their company's stock put their retirements in jeopardy.

Enron misled investors about its financial condition, but there was nothing particularly unusual about its retirement plan. Nor were its employees the first to invest too much of their own money in the company where they worked.

"We've seen it time and again," said David Sandretti, communications director for Sen. Barbara Boxer, a California Democrat.

The potential for another Enron led Boxer and Sen. Jon Corzine, a New Jersey Democrat, to propose reforms in tax-deferred 401(k) savings plans.

Yet others argue that proposed restrictions would threaten the contributions some employers make to employee accounts.

"I don't want to see restrictions that, while well intended, are overly broad and restrictive or stop employers' stock from being available," said Andrew Liazos, a Boston lawyer who helps companies design compensation plans.

Regardless of what happens, the Enron debacle shows why all 401(k) account holders need to understand the risks to their retirements.

Enron's collapse into bankruptcy drove its stock price to 52 cents a share Friday. Less than a year ago, it traded above $80.

The plunge devastated employees' 401(k) savings because more than 60…